9203R1163E13
STAR SUPERSEDED WITHOUT SUMMARY
Accession No.(s): 9203R1163E13
Document superseded on: 08/15/2013
STATE OF TEXAS
COMPTROLLER OF PUBLIC ACCOUNTS
FRANCHISE TAX
Rule 3.552. Taxable Capital: In Process of Liquidation.
(a) A corporation in the process of liquidation is required to pay the taxable
capital component of the franchise tax only upon its issued capital stock, less
liquidating dividends actually paid to the stockholders. Both the president and
secretary must, however, execute and file with each tax report filed during the
period of liquidation an affidavit stipulating that the corporation is in a
bona fide state of liquidation and also stating the amount of issued capital
stock and the amount and date(s) of liquidating dividends actually paid to the
stockholders. There also must be filed with the first tax report due after
entering into the state of liquidation a copy of the plan of liquidation as
adopted and ratified by a majority vote of the stockholders. A corporation may
gain the benefits of the reduced taxable capital for an annual report if it
enters a bona fide state of liquidation prior to January 1 of the reporting
year. A corporation may gain the benefits of the reduced taxable capital for an
initial report if it enters a bona fide state of liquidation prior to the first
anniversary date of its charter or doing business in Texas or obtaining a
certificate of authority, whichever one is applicable. If liquidating dividends
paid prior to January 1 or the first anniversary date of any reporting year
exceed the amount of issued capital stock, the corporation thereafter will have
zero for the taxable capital component of the franchise tax.
(b) The terms "process of liquidation" and "bona fide state of liquidation" do
not include the dissolution of a corporation by merger or consolidation with
another corporation. The terms mean that the corporation in good faith has
begun liquidating for the purpose of winding up its business affairs and
terminating its legal existence. If the corporation does not terminate its
business affairs and dissolve the corporation in accordance with the plan of
liquidation, the corporation shall be liable for the difference in the amount
of tax reported and paid pursuant to the plan of liquidation and the amount of
tax that otherwise should have been reported and paid, plus applicable
penalties and interest on such difference.
Effective Date: March 16, 1992
Filed with Secretary of State: February 24, 1992
Comptroller of Public Accounts
ACCESSION NUMBER: 9203R1163E13
SUPERSEDED: Y
DOCUMENT TYPE: R
DATE: 03/16/1992
TAX TYPE: FRANCHISE